Section 14A disallowance recomputation stands where appellate figures are corrected and undisputed, despite objection to Rule 8D.

Section 14A disallowance under Rule 8D was recomputed by the Commissioner (Appeals) after correcting factual inaccuracies in the Assessing Officer's figures. The assessee had already made a voluntary disallowance against exempt dividend income, and the Assessing Officer enhanced it without recording that the assessee's own computation was unreasonable or inadequate. The Revenue did not dispute the corrected figures before the appellate authority, so the recomputation stood on the basis of correct and undisputed facts. The observation that Rule 8D was not retrospective did not affect the result because the appellate computation was otherwise made on proper figures.

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Issues: Whether the Revenue's appeal against recomputation of disallowance under Section 14A read with Rule 8D could succeed when the Commissioner (Appeals) corrected the Assessing Officer's factual inaccuracies and the revised figures were not disputed.

Analysis: The assessee had voluntarily disallowed expenditure attributable to exempt dividend income. The Assessing Officer enhanced the disallowance by applying Rule 8D, but without recording any finding that the assessee's own disallowance was unreasonable or inadequate. The Commissioner (Appeals) noticed factual errors in the figures used by the Assessing Officer and recomputed the disallowance on the correct figures. The Revenue did not dispute those corrected figures in the appeal. The observation that Rule 8D was not retrospective was immaterial because the Commissioner (Appeals) had in any event applied Rule 8D on the basis of correct and applicable figures.

Conclusion: The Revenue's challenge failed and the disallowance as recomputed by the Commissioner (Appeals) was upheld against the Revenue.

Ratio Decidendi: Where the appellate authority recomputes a disallowance on correct, undisputed figures and no factual error in that recomputation is shown, an appeal challenging the computation does not survive merely on an abstract objection to Rule 8D.

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